WHY CANNOT POOR COUNTRIES UTILIZE EXISTING KNOWLEDGE? EXPANSION OF FIRMS AND HUMAN CAPITAL ACCUMULATION BY TRAINING

Current growth literature does not explain the inability of poor countries to utilize existing knowledge. This study presents a stylized development model based on firms' expansion through on‐the‐job training. Since trained workers can supervise and train more workers, a development process in which output and productivity increase up to a full utilization of existing technology is generated. Unlike schooling‐based models, which require an assumption regarding a smaller local stock of knowledge, this study relies on the size of the industrial sector and the limited supply of training opportunities, therefore highlights barriers to development, even when technology and capital are available. (JEL O1, O4, J2)     

FINANCIAL AND INSURANCE SERVICES TRADE: DOES EXCHANGE RATE OR INCOME MATTER?

This paper aims to investigate the impacts of exchange rate and income changes on financial and insurance services trade by utilizing the quarterly bilateral trade data of the United States and its major trading partners from 2003 to 2017. No long‐run exchange rate effects on imports and exports of insurance services trade are found. The impact of exchange rates on insurance services may be weak since competition among service providers depends on product differentiation than on exchange rates. On the contrary, income demonstrates significant impacts on both financial and insurance services trade in the United Kingdom, Canada, Japan and Australia. (JEL C22, F14, G20)     

WAGE DIFFERENTIALS ACROSS LABOR MARKETS AND WORKERS: DOES COST OF LIVING MATTER?

Wage differential studies rarely account for interarea differences in cost of living, owing both to data limitations and theoretical ambiguity. This study develops a price index for 185 metropolitan areas comprising about 70% of the U.S. labor force. Current Population Survey data for 1985–95 and data on site-specific amenities are used to estimate earnings differentials based on nominal wages, wages fully adjusted for measured cost of living, and a simple approximation of "real" wages with partial adjustment for price-level differences. Dispersion in approximate real wages across 185 labor markets and differentials by region and city size are substantially lower than dispersion in nominal or full adjustment wages. Estimates of racial and ethnic differentials display moderate sensitivity to choice of a wage measure, whereas other standard differentials do not. Both nominal wages and wages fully adjusted for cost of living may provide misleading estimates of real wage differentials. Absent data on interarea prices and amenities, researchers should include detailed controls for region and city size in nominal wage equations. ( JEL J31, R23)     

SOCIAL-ETHNIC SCHOOL COMPOSITION AND SCHOOL MISCONDUCT: DOES SENSE OF FUTILITY CLARIFY THE PICTURE?

This article assesses whether social-ethnic composition influences students' school misconduct. Based on general strain theory, we expect to find that individual sense of futility acts as an intermediate mechanism. Starting from cultural deprivation and oppositional culture theory, however, we hypothesize that a shared school culture of futility acts as mediator. Multilevel analyses of data from the Flemish Educational Assessment, consisting of 11,872 students in 85 schools, showed that ethnic composition has an impact on school misconduct: there is more deviance in ethnically mixed schools than in ethnic concentration schools due to a greater student sense of futility. The presence of a culture of futility did not affect the probability of being deviant. These results were true only for natives: school factors did not affect migrants' deviancy. We conclude that, although a dispersal of ethnically diverse students across all schools is favorable, this can yield negative side effects.     

FIRM SURVIVAL,UNCERTAINTY, AND FINANCIAL FRICTIONS: IS THERE A FINANCIAL UNCERTAINTY ACCELERATOR?

Using a large panel of unquoted UK firms over the period 2000–2009, we examine the impact of firm‐specific uncertainty on corporate failures. In this context we also distinguish between firms which are likely to be more or less dependent on bank finance as well as public and nonpublic companies. Our results document a significant effect of uncertainty on firm survival. This link is found to be more potent during the recent financial crisis compared with tranquil periods. We also uncover significant firm‐level heterogeneity because the survival chances of bank‐dependent and nonpublic firms are most affected by changes in uncertainty, especially during the recent global financial crisis. (JEL E44, F32, F34, G32)     

FAMILY STRUCTURE AND COLLEGE GRADUATION: IS THE STEPPARENT EFFECT MORE NEGATIVE THAN THE SINGLE PARENT EFFECT?

We use data from the National Longitudinal Education Study (NELS) to build upon previous research that considered the negative effects of living in mother-only families and stepparent families on the subsequent educational attainment of children. Our results break new ground in finding that although those who lived in a mother-only family are not less likely overall to graduate college than those who lived with two biological parents, they are significantly less likely to graduate college given four-year college attendance even when other important factors are controlled. In addition, we find that those who lived in a stepparent family are less likely overall to graduate college than those who lived with two biological parents when other important factors are controlled. This difference for those who lived in a stepparent family is due to lower chances of four-year college attendance given high school graduation and of college graduation given four-year college attendance.